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Finnish retirement age slipped in 2008

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  • Finnish retirement age slipped in 2008

FINLAND - The average effective retirement age for Finnish workers decreased slightly to 59.4 years in 2008 as the first baby boomer age group reached the lower-age limit for the old age pension last year, according to Eläketurvakeskus, the Finnish Centre for Pensions.

Figures from the organisation showed the decrease compared with 2007 was only 0.1 years, while the effective retirement age has risen between 2000 and 2008 by more than six months, and showed the average effective retirement age for people aged 50 - not including those with disability pensions - was 61.4 years.

The Finnish Centre for Pensions added the slight drop last year "can mainly be explained by the fact that persons who have already reached the lower age limit for the old-age pension, especially 63 and 64-year-olds, have retired to a larger extent than before".

It pointed out the 'baby-boomers' are now nearing retirement age, with the first baby-boomer age group reaching the lower age limit of 63 years for the old-age pension last year, which meant "the number of new retirees increased clearly from the previous year".

However, the centre reported small changes in effective retirement ages have not been seen in the employment rate of older workers, as between 2000-08 the employment rate for 55-64 year-olds increased by 14 percentage points, while "an especially rapid increase can be observed for over 60-year-olds".

The organisation also highlighted recent research by the Dublin-based European Foundation for Living and Working Conditions (Eurofound), which showed Finnish workers "have a strong trust in their statutory pension provision".

Results from the survey on quality of life suggested Finns awarded their statutory pension scheme seven out of 10 - the second highest mark among European countries and beaten only by the 7.2 from Luxembourg.

Other figures revealed Norway scored 6.8, followed by the Netherlands and Denmark with 6.7 and 6.1 respectively, while Swedish workers gave their pension scheme a quality grade of 5.6 and Germany received a 4.5.

The survey question, which asked respondents to grade public or state pension systems, resulted in an average grade for the 15 'old' EU member countries of just five out of 10.

New EU member countries meanwhile scored an average of 4.2, and for the EU as a whole the quality score - which is weighted so the figures from larger countries carry more impact than smaller countries - was 4.8. 

The figures follow a recent column by Jukka Rantala, the managing director of the Finnish Centre for Pensions, in Helsingin Sanomat in January where he claimed although Finland's earnings-related pension funds had been impacted by the financial crisis, its -12% rate of return "was clearly better than the weighted average based on the OECD countries investments at -18%".

In addition, he said the strength of the scheme had been tested and "has proved its worth", and suggested "the crisis has no significant effect on the long-term financing outlook, since the earnings-related pension scheme adapts well to various financial developments".

However Rantala admitted in the column, "the likely downturn in the economy over the next few years does add pressure to the negotiations surrounding the earnings-related pension contribution".

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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